In today’s fast-paced technological environment, there are a million and one ways to go into business. You can start up an online bookstore. You can develop apps for ever-expanding mobile platforms. You can ignore the last 30 years of technological advancement entirely and open an old-school diner that utilizes handwritten tickets and checks. You can also start a business reselling products — whether Internet-based or physical — that some other company makes.
Launching a reseller business has much to recommend it, but there is much to carefully consider as well. Here are six essential questions to ask yourself before you embark on owning and running your own reseller business.
1. Is Your Knowledge Base Consistent With What You’ll Sell?
One of the most obvious benefits of a reseller business is that you don’t need to worry about the complexities that accompany manufacturing a product. However, without solid knowledge about the product you’re selling, that benefit will end up being of little value to you. Making money as a reseller requires thorough knowledge about what you’re selling, the manufacturers supplying you with what you’re selling, and the demographic to whom you’re hoping to sell. Whether you’re reselling Cisco products because of their useful OIP through ScanSource or you’re reselling PlayStation 4s because you love Sony and video games, the need to know is the same, and the more you know, the better off you’ll be.
2. Is There a Market?
Once you’ve determined what it is you’d like to resell, it’s essential that you determine whether or not there’s a market — a.k.a. a customer base — that wants to buy it from you. Who, exactly, is likely to purchase what you’re selling? Where do they live? How much can they pay? Will you need to ship anything to them? How will you let that customer base know you are selling what they’re looking for? There is no substitute for doing your homework in this department. Without a viable market to sell to, all the knowledge and hard work in the world won’t help your business succeed.
3. Do You Have a Marketing Plan?
Like it or not, very few products sell themselves, which is why it’s essential for a reseller to have a rock solid marketing plan in place. While traditional media is still a valid outlet for marketing, online marketing is often cheaper and more versatile. That being said, your demographic has a lot to do with where and how you market, so make sure you understand the type of customer to whom you’re trying to sell so you can sell to them via channels they frequent. From there, develop a cohesive message and strategy, and get enough financing in place to carry your initial marketing campaign through from start to finish.
4. Who Is Your Competition?
Ideally, you would launch a reseller business that offered a product no one else was reselling, but the odds of that occurring are very slim. Therefore, it’s important to identify just who your competition is, what they’re offering, and what they’re charging. While offering a product at a lower price is one way to beat your competition, it isn’t the only way. Make sure you differentiate your business from the competition in a way that is meaningful — such as adding value or giving a money back guarantee — and make sure that difference is easily expressed to customers.
5. To VAR or Not to VAR?
A value added reseller (VAR) is a reseller business that resells a product after adding something to it that changes the product and makes it more valuable to potential buyers. What is added can run the gamut, but since most VARs are in the IT and tech industries, the value they’re commonly adding usually includes training, support, added tech, or customization. Deciding whether or not to be a VAR depends on many factors, but, in general, adding value to whatever you’re reselling is a good move provided you have the expertise, staffing, vision, and support required.
6. Do You Have the Financing You’ll Need?
Financing your business is an essential step as well, and while it’s true that being a reseller means you don’t have to pony up the dough to make whatever it is you’ll be selling, you still need a way to finance your efforts. Whether you get a business loan, clean out your savings, or make use of a business credit card, make sure you have enough capital to float yourself and your business until you start to make money.
So, go into business as a reseller. Just make sure you’ve got good answers to these six questions first.